Supplement to P.D. No. 111 (January 26, 1973)

September 9, 1973

PRESIDENTIAL DECREE NO. 111-A

SUPPLEMENTING PRESIDENTIAL DECREE NO. 111 DATED JANUARY 26, 1973, ENTITLED "DECLARING THE EFFECTIVITY OF THE CREATION OF THE COMMISSION ON AUDIT AS PROVIDED IN THE NEW CONSTITUTION AND PROVIDING GUIDELINES FOR THE OPERATION THEREOF"

WHEREAS, Presidential Decree No. 111 dated January 26, 1973, has declared that the Commission on Audit created in the new Constitution is now in existence, and provided guidelines for its operations;

WHEREAS, the General Auditing Office may serve as the nucleus of the Commission on Audit; and cEaDTA

WHEREAS, there is an imperative need to set up an organization for the Commission on Audit that shall most effectively and economically carry out its powers and functions.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines and pursuant to Proclamation No. 1081 dated September 21, 1972, and General Order No. 1 dated September 22, 1972, do hereby order and decree:

SECTION 1. The Commission on Audit, hereinafter referred to as the Commission, shall consist of the Commission Proper to be constituted pursuant to Section 1, Article XII-D of the new Constitution; an Administrative Service; a Legal Service; an Accountancy Service; a Systems and Training Service; a Program Audit Office; three National Government Audit Offices; a Local Government Audit Office; and, a Corporate Audit Office.

SECTION 2. The Commission Proper shall sit as a body and promulgate policies, rules; regulations, and standards governing the performance of the powers and functions of the Commission in accordance with the new Constitution. It shall appoint the officials and employees of the Commission in accordance with the Civil Service Law, pursuant to Article XII-A, Section 4, of the new Constitution. It is authorized to make changes in the Composition, distribution and assignment of auditing units as well as the personnel whenever the needs of the service so require.

SECTION 3. The Chairman shall act as the presiding officer of the Commission Proper and the chief executive officer of the Commission.

SECTION 4. The Administrative Service shall be responsible for providing the Commission with services relating to budgeting, accounting, personnel, records, supplies, equipment, collecting and disbursing, housekeeping, and other related services. It shall have a Budget, Cash and Property Division; an Accounting Division; a Personnel Division; a Records Division; and a General Services Division. STIcaE

a. The Budget, Cash and Property Division shall provide budgeting, collecting and disbursing, and property management services for the Commission.

b. The Accounting Division shall maintain the books of accounts of the Commission and provide other related accounting services.

c. The Personnel Division shall provide personnel management services for the Commission.

d. The Records Division shall provide records management services for the Commission.

e. The General Services Division shall provide housekeeping, security, messengerial, transportation and other related services for the Commission.

SECTION 5. The Legal Service shall be responsible for performing advisory and consultative functions and rendering legal services with respect to the performance. of the functions of the Commission and to the interpretation of general auditing rules and regulations and pertinent laws. It shall handle the investigation of administrative cases filed against the personnel of the Commission, evaluate and act on all reports of involvement of said personnel in anomalies and/or irregularities in government transactions, and such other investigative work to be ordered by the Commission. In addition, it shall represent the Commission in preliminary investigations of malversation cases discovered in audit, and assist the Solicitor General and the Tanodbayan in handling cases involving the Chairman or any of the Commissioners, and other officials and employees of the Commission. It shall have a National Government Division, a Local Government Division, a Corporation Division, each performing the functions of the Legal Service as they pertain to their respective clientele area, and an Investigation and Prosecution Division.

SECTION 6. The Accountancy Service shall be responsible for preparing the annual financial report of the Government, its subdivisions, agencies. and instrumentalities, including government-owned or controlled corporations (as consolidated by the Corporate Audit Office) and other financial and/or statistical reports as may be required by the Commission; verifying appropriations of national government agencies and controlling fund releases thereto; and preparing statements on local government's revenues, legal borrowings, and net paying capacities for reclassification and other purposes. It shall have an Accounts Division, a National Government Accountancy Division, a Local Government Accountancy Division, and a Treasury Vault and Banking Audit Division.

a. The Accounts Division shall control the release of allotments out of appropriations provided under various appropriations acts, and undertake overall National Government cash reconciliation.

b. The National Government Accountancy Division shall prepare required annual and other financial and/or, statistical reports on the operations and financial conditions of the National Government and reconcile public debt.

c. The Local Government Accountancy Division shall prepare required annual and other financial and/or statistical reports on the operations and financial conditions of Local Governments and hospitals maintained by Local government units.

d. The Treasury Vault and Banking Audit Division shall audit cash transactions in the vault of the Bureau of the Treasury.

SECTION 7. The Systems and. Training Service shall be responsible for developing general accounting, auditing, and related fiscal control systems, and formulating and implementing the Commission's training programs. It shall have a Systems Division and a Training. Division.

a. The Systems Division shall conduct researches and studies along modern procedures and techniques in, and develop systems for government accounting, auditing, and related fiscal controls.

b. The Training Division shall develop and implement the training programs of the Commission.

SECTION 8. The Program Audit Office shall be responsible for conducting selective post audit of accounts and financial operations of the Government and technical property audit. It shall have a National Government Special Audit Division, a Corporation Special Audit Division and a Property Audit Division.

a. The National Government Special Audit Division shall conduct selective post audit of accounts and financial operations of National Government agencies and instrumentalities.

b. The Local Government Special Audit Division shall conduct selective post audit of accounts and financial operations of local governments.

c. The Corporation Special Audit Division shall conduct selective post audit of accounts and financial operations of government-owned and/or, controlled corporations.

d. The Property Audit Division shall undertake technical inspection of deliveries of government purchases and appraisal of government property.

SECTION 9. The National Government Audit Offices shall be responsible for exercising supervision and control over the implementation of auditing and accounting rules and regulations in departments, bureaus and, offices of the National Government, pursuant to Article XII-D, Section 2(1) and Article VIII, Section 8(2) of the new Constitution. There shall be the National Government Audit Office "A", the National Government Audit Office "B", and the National Government Field Audit Office. The National Government Audit Offices "A" and "B" shall conduct continuous audit of all accounts and trial balances pertaining to the revenues and receipts of, expenditures and uses of funds and property owned or held in trust by, or, pertaining to, central offices of National Government agencies and instrumentalities, including the National Assembly. The National Government Field Audit Office shall conduct continuous audit of all accounts and trial balances pertaining to the revenues and receipts of, expenditures or uses of funds and property owned or held in trust by, or pertaining to regional and field offices of the National Government, including national high schools, national vocational schools, national field general hospitals, and state colleges and universities.

SECTION 10. The Local Government Audit Office shall be responsible for exercising supervision and control over the implementation of auditing and accounting rules and regulations in local government units. It shall have provincial or city auditing units which shall provide auditing services to provinces, cities, municipalities and barrios as well as schools and hospitals maintained by them.

SECTION 11. The Corporate Audit Office shall be responsible for exercising supervision and control over the implementation of auditing and accounting rules and regulations in government-owned and/or controlled corporations, and self-governing boards, commissions, or agencies of the National Government, and in the conduct of audit of financial operations of public utilities and franchises. It shall review and analyze corporate audit reports and prepare the consolidated report thereof for inclusion in the annual report of the Commission to be prepared by the Accountancy Service. It shall have a Public Utility Rate and Franchise Tax Audit Division and corporate auditing units in all government corporations and similar instrumentalities.

a. The Public Utility Rate and Franchise Tax Audit Division shall audit financial operations of public utilities for rate determination and franchise taxes as required by pertinent laws or upon request of proper authorities.

b. The corporate auditing units shall conduct continuous audit of all accounts and trial balances and financial statements pertaining to the revenues and receipts of, expenditures or uses of funds and property owned or held in trust by, government corporations or instrumentalities and submit annual reports to the Commission.

SECTION 12. The General Auditing Office shall constitute the nucleus of the Commission, and all applicable appropriations, records, equipment, property and such personnel as may be necessary are transferred to the Commission.

SECTION 13. Pending the constitution of the Commission on Audit, the incumbent Auditor General shall continue in Office and shall exercise the powers properly appertaining to the Commission.

SECTION 14. This Decree shall take effect immediately.

DONE in the City of Manila, this 9th day of September, in the year of Our Lord, Nineteen Hundred and Seventy-Three.